Duncan uses bogus stat to hit for-profit colleges

“Of the for-profit gainful employment programs that our department could analyze, and which could be affected by our actions today, the majority — the significant majority, 72 percent — produce graduates who on average earned less than high school dropouts.” So said Education Secretary Arne Duncan at a White House news conference on March 14. That earned two “Pinocchios” for lying from the Washington Post’s fact-checker.

Embedded image permalinkEssentially, Duncan compares apples to oranges — with a few lemons thrown in — to make for-profit colleges look bad.

The Education Department estimates that high school dropouts average $24,492 year. The Labor Department puts the median annual wage at $18,580 to $22,860. A Census estimate is $20,241.

Then, Duncan compares employed dropouts’ earnings to all recent for-profit graduates. Comparing all dropouts to all for-profit graduates — or employed dropouts to employed graduates — would show a very different picture.

Comparing dropouts of all ages, including many with job experience, to less-experienced for-profit graduates also skews the results.

Duncan’s number looks at the number of programs that produce low-earning graduates, not at the number of graduates. “The Education Department does not have individual student data, so it could well be that most graduates do fine, especially from the larger programs,” reports the Post.
Six-year outcomes by starting institution type (Source: National Student Clearinghouse)A third of community college programs’ graduates earn less than high school dropouts, by the Department’s measure, observes the Post.  ”Graduates of 57 percent of private institutions — a list that includes Harvard’s Dental School but also child-care training programs — earn less than high school dropouts.”

For-profit colleges enroll many low-income, minority and adult students, who are the least likely to succeed in college. Tuition is higher, since the for-profits aren’t subsidized by taxpayers. Students depend heavily on federal loans and default rates are high.

Community college students averaged $2,300 in tuition in 2009-10 compared to $15,000 for students at for-profit two-year colleges, according to one study. However, 62.4 percent of students at for-profit two-year colleges complete a credential in six years, compared to 39.9 percent of community college students, according to the National Student Clearinghouse.

Gainful employment for all

Gainful employment regulations are baaaaaaaack. The Obama administration will try again to regulate career training programs — primarily at for-profit colleges — that leave students in debt they don’t earn enough to repay. 

The draft “includes standards for debt-to-earnings rates and other language that could generate significant debate,” reports the Washington Post. The Education Department estimates that 9 percent of career training programs could fail to meet the new standards.

The White House push is too narrow, argues Reihan Salam on Reuters.

The Department of Education plans to identify vocational programs that leave their average graduate paying a high share of their earnings in loan payments (8 percent or more of total earnings, 20 percent or more of discretionary earnings) as well as those with a high average loan default rate (of 30 percent or more). Programs that cross these red lines in two out of three years will lose the right to offer their students federal financial aid.

Curbing the abuses of this sector could do some good. But career training programs represent a small subset of the higher education universe. If we take a somewhat wider view, it seems pretty puzzling that, say, business or engineering majors at four-year colleges and universities aren’t being treated as enrollees in vocational programs.

Many recent college graduates are underemployed and unable to pay back student loans, Salam argues. Most thought their degree would lead to a good job.

If the regulation were applied to all of higher education, programs like a bachelor’s degree in journalism from Northwestern University, a law degree from George Washington University Law School and a bachelor’s degree in social work from Virginia Commonwealth University, would all be penalized,” complains Steve Gunderson, president of the Association of Private Sector Colleges and Universities, the for-profits’ trade association.

Why not “protect consumers from the least effective post-secondary programs” in all branches of  higher education?, asks Salam. Whether it’s overpriced paralegal training at a career college or an overpriced bachelor’s in film studies from a private nonprofit college, the borrower is likely to default.

ACCT: Aim ‘gainful’ rule at high-cost colleges

Gainful employment regulations should give a pass to low-cost programs with few borrowers, argues the Association of Community College Trustees (ACCT). Most community and technical college programs are in the “low cost, low risk” category. Only 9 percent of students seeking a vocational certificate go into debt, according to the ACCT statement.

ACCT strongly encourages the Administration to reconsider the “low-cost, low-risk” proposal that was offered by the community college negotiators during the 2013 negotiated rulemaking sessions.

The Administration’s utilization of the program-level cohort default rate (CDR) is problematic for community colleges. We have always believed that metrics focusing solely on borrowers alone are improper measures of institutional or program quality. The “pCDR” judges whether a significant number of students who borrow are defaulting on their federal loans even if a very small number of overall participants borrowed any such loans. Under the pCDR, a handful of borrowers could negatively impact the ability of a much larger group of students to benefit from federal aid.

Since for-profit colleges aren’t subsidized by state and local taxpayers,  students pay much higher tuition, often funded by federal grants and loans.  Those who don’t find good jobs are at high risk of defaulting on their loans.

Students borrow for living costs

“Some Americans caught in the weak job market are lining up for federal student aid, not for education that boosts their employment prospects but for the chance to take out low-cost loans,” reports Josh Mitchell of the Wall Street Journal. Some don’t care if they earn a degree, writes Mitchell.  They use the loans to pay living costs or to avoid paying back previous student loans.

Take Ray Selent, a 30-year-old former retail clerk in Fort Lauderdale, Fla. He was unemployed in 2012 when he enrolled as a part-time student at Broward County’s community college. That allowed him to borrow thousands of dollars to pay rent to his mother, cover his cellphone bill and catch the occasional movie.

“The only way I feel I can survive financially is by going back to school and putting myself in more student debt,” says Mr. Selent, who has since added $8,000 in student debt from living expenses. Returning to school also gave Mr. Selent a reprieve on the $400 a month he owed from previous student debt because the federal government doesn’t require payments while borrowers are in school.

Selent earned a bachelor’s degree in communications from a for-profit college, but it didn’t help him find a good job. Now he’s taking theater classes. He wants to be an actor. The odds he’ll earn enough to pay back his loans? Not high.

Tommie Matherne, a 32-year-old married father of five in Billings, Mont., has been going to school since 2010, when he realized the $10 an hour he was making as a mall security guard wasn’t covering his family’s expenses. He uses roughly $2,000 in student loans each year to stock his fridge and catch up on bills. His wife is a stay-at-home mother who also gets loans to take online courses.

“We’ve been taking whatever we can for student loans every year, taking whatever we have left over and using it to stock up the freezer just so we have a couple extra months where we don’t have to worry about food,” says Mr. Matherne, who owes $51,600 in federal loans.

If the Mathernes never raise their earnings, which seems like a good bet, they may be able to use Pay As You Earn to avoid repaying their loans.

Students are allowed to use a portion of federal loans to cover living expenses. In theory, that lets them work fewer hours, concentrate on their studies and complete a degree more quickly. But colleges can’t deny federal loans to students who appear to be overborrowing.

Dorie Nolt, spokeswoman for Education Secretary Arne Duncan, says the Obama administration is “exploring alternatives to see how we might ensure that students don’t borrow more than necessary.”

Rah, rah, EveRy U

Via The College Fix, here’s an “honest” university ad.

Scared STEM: Tough talk for arts majors

For-profit students like teaching, but not costs

Current and former for-profit college students like their school’s quality, but not the high costs, reports Public Agenda. Alumni aren’t certain their degree was worth it.

Students and alumni “agree that their schools have caring instructors, keep class sizes small, and give effective guidance (though alumni are slightly less enthusiastic),” according to the survey. Current students say they’re making good progress in their course of study.

However, students and alumni say their schools are expensive, and nearly half of current students say they worry “a lot” about taking on too much debt.  

A third of alumni say their degree “really wasn’t worth it.” Another 30 percent say their degree’s value “remains to be seen” and 37 percent say their degree was “well worth it.”

About half of the employers surveyed see few differences between for-profit and not-for-profit colleges. The rest see public institutions as superior. However, many employers aren’t clear about which colleges are for-profit or non-profit.

Many students don’t realize they’re attending a “for-profit” school. 

Like community colleges, for-profit colleges draw many low-income students, notes Public Agenda.  These “economically vulnerable” students are not “comparative shoppers.” Just 39 percent of for-profit undergraduates and 32 percent of for-profit alumni had considered more than one school before they enrolled at their current institutions. Even fewer considered a non-profit alternative. Community college students show similar patterns.

Thank God I wasn’t college material

Thank God I wasn’t college material, writes Matt Walsh.

He hated high school.

I dreaded every class, every assignment, every test, every worksheet, every mound of busywork, every shallow and forced interaction with peers I couldn’t relate to or connect with or understand; every moment, every second, every part, every inch of every aspect of my public educational experience.”

One day in detention, the teacher asked what he wanted to do with his life. He thought maybe he could be a writer. Writing was the only thing that came naturally.

 That’s when she dropped the bombshell: “Well, that sounds like an amazing goal, Matt. Get those grades up and go to college for a degree in creative writing!”

. . . I have to go to college to do the one thing I’m kind of halfway good at doing? I have to finish high school and then go through FOUR MORE YEARS OF THIS? Impossible. I’m not college material. I’m not even high school material.

And I have to get a DEGREE in CREATIVITY? Wait, WHAT? Your creativity comes from your own mind and your own heart — you can’t learn how to be creative. If I can write things, and people want to read the things that I write, shouldn’t I be able to market that ability, regardless of my college experience?

Walsh never went to college. That means he didn’t “amass a gigantic debt” or “miss out on four or five years” developing his skills.  He supports his family of four as a writer.

College makes sense for future doctors, lawyers, engineers and the like, Walsh writes. But it’s a scam for most students.

Something has to change. Listen to me on this one. Something HAS to change. This can’t continue. It is not a sustainable model. There are millions of kids with no assets, no plans, and no purpose, taking out enormous loans to purchase a piece of paper they’ll likely never use. It can’t go on this way.

. . . Total student debt has gone up by 275 percent in the last decade. How far will it climb, how many more kids will be thrown to the wolves, before we change direction? Since I was born, college tuition rates have gone up by 500 percent. FIVE HUNDRED PERCENT. Why do we send guys like Bernie Madoff to prison while the academic elite get away with gouging an entire generation to death?

Don’t send your kids to college” unless they’re pursuing a career that requires a degree, he writes.

Writers can demonstrate their skills by writing. In many other fields, it’s harder to prove competence. But certifications, digital badges and such like could help young adults show what they know.

Chris Bowyer is the first person in his family not to go to college. He works for the family business, a media company. He thinks college costs too much.

The academic sweat shop

Young PhDs are scrambling for a few tenure-track jobs, working as poorly paid adjuncts for years on end and getting very, very angry, writes Megan McArdle on Bloomberg.

Rebecca Schuman’s “naming and shaming” of UC Riverside’s interviewing process set off an angry online debate, including Job Market Rage Redux and How the Tenured Are to the Job Market as White People Are to Racism.

“Academia is now one of the most exploitative labor markets in the world,” writes McArdle.

It’s not quite up there with Hollywood and Broadway in taking kids with a dream and encouraging them to waste the formative decade(s) of their work life chasing after a brass ring that they’re vanishingly unlikely to get, then dumping them on the job market with fewer employment prospects than they had at 22. But it certainly seems to be trying to catch up.

. . .  it’s not surprising that so many academics believe that the American workplace is a desperately oppressive and exploitative environment in which employers can endlessly abuse workers without fear of reprisal, or of losing the workers. That’s a pretty accurate description of the job market for academic labor … until you have tenure.

The academic job market won’t improve until graduate programs admit fewer students, she writes. “A lot fewer.” Some PhD programs should “go out of existence.”

But of course, this is saying that universities, and tenured professors, should do something that is radically against their own self-interest. That constant flow of grad students allows professors to teach interesting graduate seminars while pushing the grunt work of grading and tutoring and teaching intro classes to students and adjuncts. It provides a massive oversupply of adjunct professors who can be induced to teach the lower-level classes for very little, thus freeing up tenured professors for research.

Only a third of university professors are tenured or on the tenure track and only 19 percent of non-tenure-track teaching jobs are full time.

Desiree Robertson teaches sociology part-time at Southwest Tennessee Community College in Memphis while working full time at a foundation. The adjunct’s life is a balancing act, she tells the Chronicle of Higher Ed.

Rowe: College won’t pay off

Dirty Jobs’ host Mike Rowe talks to Reason.TV about the “diploma dilemma” and the high cost of college. “We are lending money we don’t have to kids who can’t pay it back to train them for jobs that no longer exist,” says Rowe. “That’s nuts.”